CommSec: Market Close 23 May 17- Market closes near the day's low

THE Australian dollar has fallen back against its US counterpart which has lifted against a basket of major currencies ahead of the release of the Federal Reserve’s policy meeting minutes.

At 0635 AEST on Wednesday, the Australian dollar was worth 74.78 US cents, down from 74.94 US cents on Tuesday.

The Federal Open Market Committee meeting at which the US central bank kept its interest rate on hold are due to be released 0400 Thursday AEST. BK Asset Management’s FX Strategy managing director Kathy Lien said it had been a, “unusually volatile” session in the foreign exchange market.

“Part of the (US) dollar’s move was driven by a strong bill auction but investors are also buying dollars ahead of tomorrow’s FOMC (Federal Open Market Committee) minutes,” she said in a morning note.

“The minutes from the last Fed meeting are widely expected to reinforce the market’s expectations for June tightening. Both the Australian and New Zealand dollars ended the day off their highs.”

Westpac’s Imre Speizer said the local currency initially rose to a multi-week high of 75.17 before the US dollar stabilised, prompting a reversal to 74.74. “Equity markets firmed slightly, the US dollar stabilised, and US interest rates rose,” he said in a note on Wednesday morning.

“The US dollar index is 0.4 per cent higher on the day, bouncing off a six-month low. The overnight peak of 0.7517 should cap AUD/USD today, given the stabilisation in the US dollar.”